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The state of New York is known in the crypto ecosystem for its famous BitLicense. This license needed by crypto companies may well evolve to provide more flexibility.
BitLicense
Created in 2015, BitLicense is a license issued by the NYDFS (New York Department of Financial Services) dedicated to crypto companies. This is compulsory for companies wishing to receive, keep, issue or exchange cryptocurrencies. In other words, it is mandatory for all crypto companies wishing to operate in the state.
Unfortunately, the latter is extremely complicated to obtain. Indeed, only 25 companies have been awarded the BitLicense in 5 years. For example, we find the companies Circle and Robinhood.
Conditional BitLicense
As we saw in the introduction, BitLicense aims to be “relaxed”. For example, the NYDFS recently announced the creation of a conditional BitLicense.
This can be issued to any crypto company, which works in partnership with a company that has already received BitLicense. Its objective will be to help companies obtain BitLicense in the long term by accompanying them.
"DFS expects an entity seeking a conditional license to endeavor to seek and obtain a full BitLicense license," said the announcement.
To receive it, crypto companies will need to indicate their intentions to work with a current BitLicense holder, as well as draft an agreement between the two companies. Thereafter, all of the documents must be transmitted and validated by the NYDFS.
Once validated, a list of recommendations will be issued and must be respected by the company. Otherwise, NYDFS reserves the right to terminate the conditional license.
This is great news for crypto companies looking to base themselves in the state of New York. Indeed, this gives them the opportunity to operate before they even receive BitLicense, as well as to show their feet to regulators in the hope of one day receiving it.
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